- Massachusetts has filed a lawsuit against Kalshi, accusing the platform of offering unlicensed sports betting.
- Kalshi argues it operates under federal regulation from the Commodity Futures Trading Commission (CFTC), not state laws.
- The lawsuit claims that more than 75% of Kalshi’s trading volume relates to sports contracts.
- Other states, including Arizona, Montana, Ohio, and Illinois, have issued cease-and-desist orders against Kalshi.
- Competitor Polymarket is reportedly preparing to launch in the U.S. after a new CFTC ruling and seeks increased funding.
The Commonwealth of Massachusetts filed a civil lawsuit on Friday against Kalshi, a prediction market platform. The state alleges Kalshi is offering unlicensed sports betting to Massachusetts residents through so-called “event contracts,” which officials say violates state gambling laws.
According to court documents, the state alleges that as of May 2025, over three-quarters of Kalshi’s trading volume comes from sports-related contracts, surpassing activity reported by major operators like DraftKings and FanDuel. Kalshi has stated it will contest the case in court, with a spokesperson saying, “We are proud to be the company that has pioneered this technology and stand ready to defend it once again in a court of law.” Kalshi also asserts, “Prediction markets are a critical innovation of the 21st century, and all Americans should be able to access them.”
The lawsuit claims Massachusetts authorities chose legal action instead of discussions. A Kalshi representative said, “Rather than engage in dialogue with Kalshi as many other states have done, Massachusetts is trying to block Kalshi’s innovations by relying on outdated laws and ideas.” The company maintains that it operates under the federal Commodity Futures Trading Commission (CFTC) and does not fall within state gambling rules.
Multiple states—including Arizona, Montana, Ohio, and Illinois—have previously issued cease-and-desist orders to Kalshi to stop offering their services to residents, as reported by SBC Americas.
At the same time, blockchain-based competitor Polymarket is planning to enter the U.S. market. Business Insider recently reported that Polymarket’s valuation could triple from its June value of $1 billion to up to $10 billion as it prepares for U.S. expansion. Polymarket CEO Shayne Coplan announced on the social media platform X that “Polymarket has been given the green light to go live in the USA by the CFTC.” Further developments are expected as both companies navigate legal and regulatory challenges.
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